A different perspective

17 May 2019

An investment approach which takes into account a business as a whole has seen the Australian Foundation Investment Company (AFIC) to be named the top listed investment companies and trusts at this year’s Fund Manager of the Year awards.

AFIC’s chief executive and managing director, Mark Freeman, said that the firm’s philosophy was to “approach all business buys as though we were purchasing the whole business, rather than trading in shares”.

“This gives us a different perspective to many investors in the market and allows us to adjust our position in companies relative to the quality of the company over the long term, rather than getting bogged down in short term investor sentiment.”

AFIC aimed to focus on quality as the primary consideration before looking into the prospects of value and growth and holding quality companies over the long term had largely formed the basis of its approach.

Freeman also stressed that according to him the firm’s long term track record of adding value coupled with its unique investment approach, with no performance fee, was another strong point.

“We are focused on quality companies that can perform over the long term, not on short term relative performance.

“To get the full value add from being a long term investor you need to look past the five year horizon,” he said.

According to Andrew Lockhart, managing partner at Metrics Credit Partners, the MCP Master Income Trust has earned its nomination thanks to its innovative approach and being unique in the context of the market globally, while offering investors a predictable and stable income.

“It was the first fund of this kind to be listed and there were a number of people that came after us to copy what we’ve developed,” he said.

Kieran Kennedy, a portfolio manager of Mirrabooka Investments, attributed the success the investment strategy to a strong focus on quality as the first filter that would come before growth prospects and value.

“This means that we aim to always have a portfolio of higher quality companies than the benchmark and don’t stray as often into buying things for the wrong reasons, and don’t sell good businesses because they have hit a pre-defined price target.”

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